Budget debate starts in France

On Tuesday, October 13, the French parliament began discussing next year's budget, with a focus on managing public debt and reducing the budget deficit. The government is emphasizing the need for significant budgetary savings, aiming to achieve 54 billion euros in cuts.

Government warns of future cuts

Sébastien Lecornu, a government official, stressed that these savings efforts are intended to prevent "imposed and violent cuts" in the future. Public debt in France reached 3,595.5 billion euros by the end of the second quarter, equivalent to 120% of the country's GDP.

Debt has grown over time

This level of debt has been increasing for decades, reaching 2,200 billion euros when President Emmanuel Macron took office in 2017. Despite warnings from politicians and economists at that time, the issue did not generate the same level of concern then.

Investor focus on stability

Economist Philippe Crevel from the Cercle de l'épargne argues that the real issue is not the total debt, but the ability to reverse the trend and regain investor confidence. Investors are more concerned with political stability and how the government manages its budget than the amount of debt itself.

Borrowing costs are rising

France's borrowing costs have increased, with the country now paying 4.9% interest on ten-year bonds, up from 3.5% a year ago. This rise reflects growing concerns about risk, and it is expected to lead to a higher debt burden of 77.4 billion euros in 2026, which will exceed the education budget for that year.

Debt service costs rising

The cost of servicing the debt, which includes both interest and principal repayments, was estimated at 219.3 billion euros in 2025. This increase in debt service costs is expected to have indirect effects on personal finances through potential austerity measures affecting public services and purchasing power.

Bank rates influence personal finances

The immediate effects of rising debt costs are more visible in the rates set by banks, which can increase the cost of loans and savings accounts. Philippe Crevel cautions that while the situation in France is not as severe as Greece's debt crisis, the government remains committed to strict measures to avoid a similar outcome.